‘Jedi Council’ And Lady Gaga’s Team To Help Menlo Seed Start-Ups

Menlo Ventures plans to have a ‘Jedi Council’ help advise it on its new $20 million seed-stage fund.

Menlo Ventures has announced the launch of a $20 million seed fund, the latest in a string of venture firms to pursue micro-deals and better compete against the growing leagues of angel investors bankrolling lean start-ups.

Announcing the Menlo Talent Fund on stage at the TechCrunch Disrupt conference in San Francisco on Tuesday, Menlo Managing Director Shervin Pishevar described the fund as a way for the firm to quickly move on early deals. All decisions will be made within 24 to 72 hours, and investments will range between $50,000 and $1 million and can be made without all partners buying in, he said.

There will also be what Pishevar described as a “Jedi Council” with mentors, advisors and investors including Troy Carter, founder of music management company Atom Factory, who manages Lady Gaga and other artists.

Given the name “Talent Fund,” the vehicle figures to back new efforts to connect performers and their fans. Indeed, one of its first investments, The Backplane, counts Lady Gaga as a part owner. The company aims to create a communities platform combining calendar, email and social networking functions, including Facebook and Twitter, to allow groups ranging from Girl Scout troops to celebrity fan clubs to communicate seamlessly.

“You’re seeing the broad institutionalization of seed investments,” said Joe Kraus of Google Ventures, the standalone venture fund of Google Inc. that has already done more than 80 seed investments this year.

Kraus and other VCs including Accel Partners’ Rich Wong, Greylock Partners’ James Slavet and Charles River Ventures’ George Zachary, responded to Pishevar’s announcement by saying their firms had similar programs and enthusiasm for early stage deals.

Wong said Accel has done 30 seed investments in the past year, although there is no standalone fund for it or special branding associated with them. Greylock, meanwhile, has what Slavet called a “quick decision fund” and has invested as much as $500,000 in 91 companies through it.

Menlo Ventures has invested in eight companies so far including The Backplane Inc., CakeHealth Inc., Comprehend Inc., LeanLaunchLab Inc., Parse Inc., RG Labs Inc. and Tracksby Inc. One company has yet to be announced.

The $20 million Talent Fund will be carved out of Menlo’s $400 million fund MV-X, which closed last October.

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